PREVIEW-Putin Venezuelan trip to focus on energy, arms

* Moscow can afford to lend money as energy prices strong

* Russian firms' domestic growth limited by Kremlin

* Venezuela wants to beef up its weaponry

By Darya Korsunskaya

MOSCOW, March 31 Russia will cement energy ties
with its closest Latin American ally, Venezuela, when Prime
Minister Vladimir Putin travels to Caracas this week for a trip
that could also lead to arms deals that worry Washington.

Venezuela, South America's top oil exporter and a member of
the oil producers cartel OPEC, is seeking funds and technology
to help develop its oil deposits and is also seeking loans to
buy Russian military hardware.

"We should expect a lot of big arms and energy contracts.
When Putin has travelled recently to centres like India he
brought back a lot," said Fyodor Lukyanov, editor of the
magazine Russia in Global Affairs.

"It is always a good chance for Putin to show to the United
States that we have a lot a friends all over the world."

Putin secured $10 billion in energy, nuclear and arms deals
in India this month and Russia is offering New Delhi a role it
its energy projects, Russian military hardware and its nuclear
reactors, amid rising competition from French and U.S. firms.
[ID:nSGE62B0B8] [ID:nSGE62B0B8]

"It is an opportunity to advance cooperation in the fields
of energy, industry, agriculture and defence, among others,"
Venezuela's foreign ministry said ahead of the visit. Putin's
office was due to comment on the visit later in the week.

Chavez travelled to Moscow in September to receive over $2
billion in loans for weaponry, including tanks and the S-300
advanced anti-aircraft missile. [ID:nLA719656]

During the trip he announced Venezuela recognised two
pro-Russian rebel regions of Georgia as independent states, a
rare diplomatic success for Moscow, which has tried
unsuccessfully to persuade its allies to do so.

U.S. Secretary of State Hillary Clinton has called Russian,
Iranian and Chinese economic and political gains in Latin
America disturbing after failed attempts by the previous U.S.
administration to isolate Venezuela and Bolivia. [ID:nN01364341]

Clinton also expressed concern last September about
Venezuelan arms purchases and their potential for triggering an
arms race in the region. [ID:nN1571529]

ENERGY RELATIONSHIP

Venezuela wants to beef up its arsenal to resist what Chavez
terms U.S. imperialism in Latin America, though tensions have
also been rising with neighbouring Colombia, a close U.S. ally
and historic rival of Venezuela.

"Russia sees the strengthening of its positions in this
region as an extremely important and a good answer to the
widening U.S. influence in Central Asia," said Alexei Mukhin,
who directs the Moscow-based Centre for Political Information.

In February, a consortium of Russian firms and Venezuela's
state-run PDVSA agreed to set up a venture to tap the Junin 6
oil field in the Orinoco oil belt, which Venezuela says has the
world's largest hydrocarbon reserves [ID:nLDE6102FC].

The development will require $20 billion in investments over
40 years to produce 450,000 barrels per day, or almost a fifth
of Venezuela's current oil production, and will involve state
giant Rosneft (ROSN.MM) and private major LUKOIL (LKOH.MM).

Valery Nesterov, analyst at Troika Dialog brokerage, said
private Russian firms were struggling to expand on home turf
because of limited access to big deposits and tax uncertainty.

"In Venezuela the geology is good, reserves are great. From
that point of view, the conditions are ideal there, though this
does not, of course, remove concerns about political risk."

Chavez, who says the United States could attack Venezuela
for its oil reserves, has also said Moscow and Tehran are
helping Venezuela develop its nuclear energy production -- but
not an atomic bomb -- to confront a power crisis.

SAO PAULO, Dec 9 The Brazilian government will
extend subsidized credit to companies interested in bidding for
airport operating licenses so long as they agree to strict
governance requirements and to hire an independent advisor to
monitor project execution.

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